Has CarTrade Found Its Missing Piece?
Last week, the Indian automotive sector woke up to what might be one of the most significant M&As in the making. CarTrade is said to be in advanced talks to acquire CarDekho, a used car marketplace cofounded by
judge Amit Jain.
Reports indicate that CarTrade, valued at roughly $1.5 Bn, is exploring a potential buyout of CarDekho’s classified business at a valuation of $1.2 Bn to strengthen its consumer business vertical.
However, a key piece of the puzzle, which also has us perplexed, is: why would a fundamentally strong company like CarTrade — whose shares have literally rocketed 167% since last year — even think about buying a loss-making rival at such a hefty valuation? Besides, what makes the acquisition of CarDekho by CarTrade a rare spectacle?
Let’s find the answers to some of these questions and more in today’s edition of
Founded in 2009 by Vinay Sanghi after a nine-year stint as the CEO of Mahindra First Choice, the company began as a B2B and C2B auction platform. Banks, fleets, and dealerships relied on CarTrade’s auctions and verification services, paying commissions for each transaction.
Remarketing remains central to its economics even today.
The pivot to used car classifieds came in 2012, with the launch of CarTrade.com and CarTradeExchange.com. But the real inflexion point arrived in 2015, when CarTrade removed a major competitor by acquiring Automotive Exchange Private Limited, the parent of CarWale and BikeWale, for $100 Mn.
The deal immediately expanded its consumer funnel, unlocked access to new vehicle research segments, and strengthened its brand stack. CarTrade then shifted away from CarWale and BikeWale’s inventory-heavy model and moved towards a more capital-light approach.
Along the way, CarTrade kept adding new capabilities through focussed acquisitions. Here’s a closer look at its acquisition portfolio:
While AISPL Adroit’s acquisition in 2016 has helped CarTrade strengthen its inspection and valuation services, Shriram Automall India Ltd (SAMIL) has deepened its remarketing moat. Today, the remarketing segment alone generates a third of CarTrade’s revenue. It grew 23% YoY to INR 62.7 Cr in Q2 FY26.
Following its IPO in 2021, CarTrade made a bold move by acquiring OLX India’s classified and auto transactions business for INR 535.5 Cr. With this, the used car marketplace cemented its presence across consumer and institutional supply chains.
Collectively, these transactions point to but one thing: CarTrade’s primary growth engine is M&A.
“CarTrade is made up of acquisitions. It is essentially a house of brands. The company buys, optimises and then scales,” said the founder of a rival company, requesting anonymity.
Now, if we put all the pieces of the puzzle together, the acquisition of CarDekho is the only piece missing.
Right from the start, CarTrade has refused to own inventory. Instead, it has positioned itself purely as a listings and auction platform. This asset-light stance provided it with the cushion and flexibility that its rivals, Cars24 and Spinny, never had.
Owning cars means geographical constraints, high refurbishment costs and marketing spends. On the contrary, listing cars means pure scale.
“If you own inventory, you may have just 70 cars in a region. If you list, you have hundreds. And you don’t spend much on refurbishment,” said the founder quoted above.
CarTrade also chose not to compete with dealers. It rather built an ecosystem around them.
This philosophy, he said, also shaped the way it handled OLX Auto. Within two months of its acquisition, CarTrade shut down OLX Auto, but retained the classifieds operation, preserving its 35 Mn user base. The arm posted a revenue of INR 55.5 Cr in Q2 FY26, up 17% YoY. It also accounted for 29% of CarTrade’s business.
This context matters because CarDekho has made a similar strategic pivot. The company exited its capital-intensive used car business in 2023, with Jain himself acknowledging the drawbacks of a capex-heavy business model.
Instead, CarDekho has doubled down on new cars, a segment CarTrade wants to scale aggressively. CarTrade already sells new vehicles via CarWale, but CarDekho’s OEM relationships are deeper and broader.
In FY24, CarDekho recorded 1.1 Bn annual sessions, attracted 60 Mn monthly users, and generated 24 Mn saleable new car leads.
Just to give context, CarTrade has 85 Mn monthly active users across its platforms. OEM commissions on new car leads are slightly higher than what used car listings generate. Pair this with CarDekho’s rich content ecosystem, and the synergy becomes obvious.
Also, after scaling in remarketing and user-car classifieds, CarTrade has identified new cars as its next growth frontier.
While the strategic logic behind the potential acquisition is clear, CarTrade is only interested in CarDekho’s new and used car classified business and not its fintech verticals — InsuranceDekho and Ruppy.
Industry analysts argue that a valuation north of $1 Bn does not bode well, given CarDekho’s recent financial performance.
The company’s revenue dipped 3.5% YoY to INR 2,250 Cr in FY24, and it posted a loss of INR 340 Cr. Paying a premium for a loss-making business, they say, is beyond any logic.
CarTrade, to be fair, has not disclosed a deal size. What we do know, however, is that the company is sitting on a cash reserve of INR 1,080 Cr ($121 Mn). Deploying the bulk of that for a single transaction only seems absurd. On the other hand, a deal of this magnitude would almost certainly require a share component, making it a part-cash, part-stock acquisition.
“The $1 Bn figure is far off. Realistically, the deal should land somewhere between INR 1,000 Cr and INR 2,000 Cr, but not INR 10,000 Cr,” said Ankit Kanodia, the founder of investment advisory firm Zen Nivesh.
At this range, one cannot expect a smooth integration. Then, it has the potential to drag CarTrade’s bottom line for the next few quarters. And we have seen a similar script play out for Delhivery that acquired Ecom Express in July this year.
If the talks are walked, the real challenge for CarTrade will be integrating CarDekho without throwing its financial rhythm off balance.
Edited By Shishir Parasher
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